Tribute drives Mazda sales higher

Vehicle importer Mazda Australia posted a strong rise in profits to $24.7 million before tax in calendar 2001.

Tribute drives Mazda sales higher

17 February 2002Ian Porter

These figures are mainly thanks to the launch of the Tribute four-wheel-drive model.

The profit was greater than its parent company's half-year result, although Mazda Motor Corporation (MMC) reports on a different financial period. The local result was struck on revenues up 39 percent to $883 million and reflected the fact that MMC carries the group's currency risk and sells cars to Mazda Australia in Australian dollars.

Mazda Australia did not release a net-profit figure, but the result equates to a theoretical $18 million after tax, almost 50 percent greater than the 2000 net profit of $12.8 million before abnormals.

"It was close to a record result and came about due to new product introductions," managing director Malcolm Gough said.

"Also our continual look at cashflows, and reduction in stocks and all those items that generate expense."

The Tribute was the new product and, as it was Mazda's first four-wheel-drive, all of the 6600 sold represented a net addition to the company's total sales, which were up 24 percent to 34,100 for the year.

The Tribute, available with four and six cylinder engines, comfortably outsold its Ford clone, the Escape, of which 2800 were sold. Importantly, the Escape only comes with the V6 engine and starts at around $35,000 while the Tribute four cylinder with manual transmission sold for $31,000.

The success of the Tribute helped lift Mazda's market share back above 4 percent for the first time in many years and Mr Gough expects a further increase this year.

He predicted that Mazda Australia would sell 37,000 vehicles this year, which would be equal to a market share of 4.7 percent if the company's prediction of 789,000 vehicles proved accurate. The higher sales are expected to generate revenues exceeding $900 million and a pre-tax profit of almost $19 million.

Mr Gough said the company was expecting strong sales from its imminent Mazda6 model, which will replace the 626 range, although it was clear that the new model would be priced at a premium in the medium sector.

The president of the parent MMC, Mark Fields, said the company would be putting more engineering effort into the way the cars drove and that the Mazda6, due later this year, would have a high-specification suspension design with double-wishbone arms at the front and multi-link set-up at the rear to deliver "sweet driving dynamics".

The company had recently closed 25 percent of its production capacity and slashed salaried workers in a bid to scramble back into the black, and Mr Fields said the results were promising already. "We expected to lose $US80 million ($A154 million) in the first half of the year to March 31 and we actually made a profit of $US10 million.

"We expect to break even in the second half and report a full-year profit of $US10 million also," he said.